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January 2, 2018

Group insurance discounts preserved by last-minute law

File photo Gov. Charlie Baker

Homeowners and motorists benefiting from group insurance discounts might not have known that a 44-year-old state law threatened to increase their premiums. That possibility was avoided Friday with a stroke of Gov. Charlie Baker's pen.

On the afternoon before the long holiday weekend, the governor signed an emergency law that was hurried to his desk by lawmakers over the remaining days of 2017.

Without the new law, insurance discounts offered through employers, unions and other organizations would have started to evaporate Jan. 1 as homeowners and vehicle owners renewed their policies. 

A requirement passed in 1973 demanded that those group insurance discounts only be valid if at least 35 percent of eligible group members buy coverage from the insurer. Lawmakers have continually suspended that requirement since 1997, according to the Massachusetts Insurance Federation, and the bill that Baker signed into law pushes the requirement off another two years.

"This is something that comes up every session," said Frank O'Brien, vice president of state government relations for the Property Casualty Insurers Association of America.

If the statutory requirement had taken effect, roughly 322,000 vehicles and 142,000 homes in the state would have been out of compliance and lost the discounts, according to the insurance federation. The discounts are typically in the range of 5 to 8 percent.

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